Just to make the math easy, let’s suppose the gouging tax is 50%.
The air purifiers problem seems like not a big problem? If they are normally “worth” $150 and you value having them at $300, you could post them up for sale at $450. Then, if someone really needs them, you get your $300, they get their air purifier, and $150 goes to disaster relief. This tax only prevents the trade if the buyers would buy them for $300 but not for $450, which limits the amount of deadweight loss here to a maximum of $149, rather than potentially unbounded deadweight loss under current policy.
A new air purifier is $150, but mine have been hanging around my house collecting dust and viruses; I don’t think a used air purifier would have gone for $150 pre-emergency. Let’s say the used value was $75. To get the same benefit as selling for $300 with no surcharge I’d need to charge $525: 2x my $300, less the $75 used value.
But I agree: the air purifiers situation is still improved when moving from the status quo (illegal) to the proposal (taxed). My point with that footnote is that the proposal still does some to discourage supply increases relative to a world without this regulation.
Just to make the math easy, let’s suppose the gouging tax is 50%.
The air purifiers problem seems like not a big problem? If they are normally “worth” $150 and you value having them at $300, you could post them up for sale at $450. Then, if someone really needs them, you get your $300, they get their air purifier, and $150 goes to disaster relief. This tax only prevents the trade if the buyers would buy them for $300 but not for $450, which limits the amount of deadweight loss here to a maximum of $149, rather than potentially unbounded deadweight loss under current policy.
A new air purifier is $150, but mine have been hanging around my house collecting dust and viruses; I don’t think a used air purifier would have gone for $150 pre-emergency. Let’s say the used value was $75. To get the same benefit as selling for $300 with no surcharge I’d need to charge $525: 2x my $300, less the $75 used value.
But I agree: the air purifiers situation is still improved when moving from the status quo (illegal) to the proposal (taxed). My point with that footnote is that the proposal still does some to discourage supply increases relative to a world without this regulation.